For the first time in company history, Toyota promoted a non-Japanese employee — Frenchman Didier Leroy — to the level of executive vice president.
To many observers, it addresses a broader problem at Japan Inc.: That its products and organizations have evolved mainly to survive in the home market, and now, it’s time to globalize.
Arthur Alexander, an economist and visiting professor at Georgetown University, says Toyota sells lots of cars abroad, yet “upper management has been very traditional.” The Japan-based decision makers must adapt, because “they can see what’s happening around them to these post-war dynamic companies falling on hard times.”
One of Toyota’s wake-up calls was a quality crisis where cars suddenly accelerated. The company blamed bad drivers and floor mats, and a public relations disaster ensued. Independent analyst Alan Baum in West Bloomfield, Michigan, faults an insular, hierarchical corporate culture.
“Because the decision-making process was still restricted to a smaller group of people in Japan,” Baum says, “it simply took awhile to get up the chain and they weren’t able to act as quickly as they would like.”